Which plan has a maximum vesting period of 2 years?

Which plan has a maximum vesting period of 2 years?

• A. RRSP
• B. Deferred Profit-Sharing Plan
• C. RESP
• D. TFSA

Answer: (B)

Vesting periods determine when employer contributions to a plan become the employee's property. For Deferred Profit-Sharing Plans, employer contributions can be subject to a vesting schedule, and the maximum allowed vesting period is two years. RRSPs, RESPs, and TFSAs are not structured with a formal employer-contribution vesting rule in the same way, so they don’t carry this two-year limit. Thus, the plan that has the maximum vesting period of two years is the Deferred Profit-Sharing Plan.

Vesting periods determine when employer contributions to a plan become the employee's property. For Deferred Profit-Sharing Plans, employer contributions can be subject to a vesting schedule, and the maximum allowed vesting period is two years. RRSPs, RESPs, and TFSAs are not structured with a formal employer-contribution vesting rule in the same way, so they don’t carry this two-year limit. Thus, the plan that has the maximum vesting period of two years is the Deferred Profit-Sharing Plan.